Deduction u/s 36(1)(va) and 43B when payment under ESI and PF is not made within the due date

Last updated: 15 October 2021

Save Share

Quick Summary

The Income Tax Appellate Tribunal (ITAT) has ruled in favour of the assessee regarding the disallowance of deductions for delayed payments of Employees' State Insurance (ESI) and Provident Fund (PF). The tribunal followed previous decisions from ITAT Hyderabad and ITAT Chandigarh, allowing the appeal.

Court :
ITAT Chandigarh

Brief :
The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) , Delhi [ ( in short the ‘Ld. CIT(A) ] Nat ional Faceless Appeal Centre dated 25.05.2021

Citation :
ITA No.176/Chd/2021

IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH ‘A’, CHANDIGARH

BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER
AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER

ITA No.176/Chd/2021

Assessment Year : 2019-20

Digiqal Solution Services Pvt. Ltd.,
SCO 61, Sector 26, Chandigarh

The Assistant Director of
Income Tax,
CPC, Bengaluru
ITO, Ward-5(1),
Chandigarh.

Assessee by : Shri Sudhir Sehgal, Adv

Revenue by : Smt.Meenakshi Vohra, Addl. CIT

Date of Hearing : 26.08.2021

Date of Pronouncement : 04.10.2021

(Hearing through webex)

ORDER

The solitary issue in the present appeal relates to the addition made in the intimation made to the assessee on
account of delayed payment of ESI and PF amounting to Rs.6,87,309/- by invoking the provisions of sect ion 36(1) (v)
of the Act .

2. Before us Ld.Counsel for the assessee submitted that various Benches of the ITAT have already adjudicated this
issue in favour of the assessee. He referred to the decision of the ITAT, Hyderabad Bench in the case of Value Momentum Software ; Vs. DCIT in ITA No.2197/Hyd/2017, dated 19.05.2021 and the decision of ITAT Chandigarh
Bench in the case of Hotel Surya Vs. DCIT in ITA Nos.133 & 134/Chd/2021, dated 05.08.2021. Copy of the orders was
placed before us.

3. Before us Ld.Counsel for the assessee submitted that various Benches of the ITAT have already adjudicated this
issue in favour of the assessee. He referred to the decision of the ITAT, Hyderabad Bench in the case of Value
Momentum Sof tware ; Vs. DCIT in ITA No.2197/Hyd/2017, dated 19.05.2021 and the decision of ITAT Chandigarh
Bench in the case of Hotel Surya Vs. DCIT in ITA Nos.133 & 134/Chd/2021, dated 05.08.2021. Copy of the orders was
placed before us.

4. In the result , the appeal of the assessee is allowed.
Order pronounced on 4th October 2021.

Please find attached the enclosed file for the full judgement

FAQ :

The appeal concerned the addition made to the assessee's income due to delayed payments of ESI and PF, specifically invoking Section 36(1)(va) of the Act.

The assessee's counsel argued that various benches of the ITAT had already ruled in favour of the assessee on this issue, citing specific previous decisions.

The ITAT Hyderabad decision in Value Momentum Software vs. DCIT (ITA No.2197/Hyd/2017) and the ITAT Chandigarh decision in Hotel Surya vs. DCIT (ITA Nos.133 & 134/Chd/2021) were referenced.

The appeal of the assessee was allowed by the ITAT.